Individuals with long-standing, treatment refractory alcohol and other drug (AOD) disorders remain a vexing challenge for State governments. As with other chronic diseases, a small proportion of clients absorb a disproportionate share of treatment dollars. Often these clients cycle through crisis episodes with bouts of high-cost care followed by poorly coordinated aftercare. As the primary payers, state and county agencies not only are concerned with inefficient spending for AOD treatment (TX) but also must contend with supporting multiple crisis services for these individuals. Recently states have been turning to disease management programs (DMP) to control Medicaid costs of caring for chronic illnesses. Despite their promise, there is only modest scientific evidence of the effectiveness of DMPs for healthcare, and none for AOD disorders. New York State (NYS) just initiated a 3-year, $25 million demonstration pilot that provides grants to 23 counties to provide case management services to high-cost utilizers of AODTX. This time sensitive R01 application in response to PAR-05-150 seeks to capitalize on this demonstration to mount and rigorously test an innovative disease management intervention for chronic addiction (DM-CA). The application is time-sensitive because the intervention and evaluation must be funded by summer of 2007 to take advantage of the demonstration. The NYS Office of Alcoholism and Substance Abuse Services (OASAS) and two counties will partner with our research group to develop and rigorously test DM-CA. The DM-CA will be a system level intervention with a framework drawn from recent innovations in health care encapsulated in the Chronic Care Model. DM-CA will be designed to improve monitoring and coordination of care in order to avert crisis events (e.g., ED visits) and help engage clients in stabilizing outpatient services, thereby reducing health care costs. Over two years, OASAS will identify 1,700 high cost AOD disordered clients (i.e., using >=$10k of AODTX in the prior year) and then randomly assign them within county to DM- CA or a control condition of usual care (UC), consisting of no case management or DMP services. Client characteristics and outcomes will be collected from extensive administrative records. Primary Aims will examine 1) reductions in crises events, 2) increases in number of outpatient AODTX, 3) increases in likelihood of HIV/HCV testing &counseling, 4) Medicaid cost reductions associated with the intervention.